Rupee plunges 45 paise to 74.20 against US dollar in early trade

The Indian rupee plunged 45 paise to 74.20 against US dollar in early trade on Monday tracking weak opening in domestic equities and sustained foreign fund outflows. Forex traders said investors are on tenterhooks amid mounting fears of a coronavirus-led economic slowdown, even after the Reserve Bank stepped in to maintain sufficient liquidity in the panick-stricken currency market.

The rupee opened weak at 74.10 at the interbank forex market and then fell further to 74.20, down 45 paise over its last close. The local unit had settled at 73.75 against the US dollar on Friday. Traders said there is a sense of anxiety among investors as they see the global economy is plunging into a deep crisis due to coronavirus (Covid-19) pandemic that has killed over 6,000 and sickened lakhs of people around the globe.

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Meanwhile, the RBI on Friday said it is closely monitoring the current global situation and assured that it will take all steps to keep markets adequately liquid and stable.

"The RBI is closely and continuously monitoring the rapidly evolving global situation and will take all necessary measures to ensure that money, debt and forex markets remain adequately liquid and stable, and continue to function normally," the central bank said had in a statement.

The RBI earlier also announced measures to infuse liquidity in the foreign exchange market, including the US dollar swaps worth USD 2 billion. Foreign investors remained net sellers in Indian capital markets for the fifth straight day, pulling out more than Rs 6,027.58 crore on Friday amid a global sell-off in equities, market data showed.

Domestic bourses opened on a negative note on Monday with benchmark indices Sensex trading 1,808.68 points down at 32,294.80 and Nifty fell 521.05 points to 9,434.15. Brent crude futures, the global oil benchmark, fell 2.87 per cent to USD 32.88 per barrel. The dollar index, which gauges the greenback's strength against a basket of six currencies, fell by 0.44 per cent to 98.31.

The 10-year government bond yield was at 6.22 per cent in morning trade.